James Murdoch's future at BSkyB could be decided before phone hacking report

Two more independent directors of BSkyB are poised to stand down, potentially
collapsing the board's unanimous backing of James Murdoch as chairman.

Pressure is increasing on James Murdoch and could lead the BSkyB board to reconsider its support for him.Photo: AFP

By Jonathan Russell and Katherine Rushton

11:50AM BST 02 Apr 2012

Dame Gail Rebuck, chief executive of publishing group Random House, and Lord Wilson of Dinton, the former cabinet secretary, are both expected to leave the pay-TV operator within months, as they each pass their ninth anniversaries on its board.

Jacques Nasser, chairman of BHP Bilton, is also expected to renounce his independent director status, which he has held since 2002, but will remain on the board in a non-executive capacity.

All three will be replaced with a new trio of independent directors who are likely to be wary of backing Mr Murdoch as strongly as the company's existing board, who said in an open letter to shareholders last year that they believed in Mr Murdoch's integrity.

The looming changeover comes at a crucial time for Mr Murdoch, whose decision over his future at BSkyB is understood to be balancing on a “fine line”.

Speculation is mounting that he could decide to leave before the Culture, Media and Sport Committee publishes its report on whether it was misled about the phone hacking scandal, expected shortly after the Easter recess.

The committee is understood to be considering whether to censure Mr Murdoch for failing to fully investigate phone hacking at News International. Should it find against him, the media regulator Ofcom would extend its investigation into whether he is a “fit and proper” person to oversee a media organisation.

Pressure on Mr Murdoch and his father Rupert has been heightened by reports that the pair will give evidence to the Leveson Inquiry into media ethics later this month.

The intense spotlight is understood to have caused concern at board level within BSkyB. Waiting until the Culture committee reports before deciding on Mr Murdoch’s future runs the risk of him leaving with his reputation further tarnished. If he were to leave of his own volition it could be easier to define his legacy, which has included increasing Sky’s share price.

Speculation about Mr Murdoch’s future in UK corporate life increased last month after the publication of a letter he wrote to the Culture committee. In it he seemed to suggest he would focus on his business activities on the other side of the Atlantic.

Addressing his resignation from News International he said: “I gave up the role of executive chairman of News International in order to devote myself fully to my existing roles… [at] News Corporation, based at the company’s headquarters in New York.”

In the letter Mr Murdoch admitted he had failed to take appropriate action to ensure the phone hacking allegations were investigated but denied misleading the Committee.

He also urged the Committee to “ensure that principles of fairness” govern its deliberations. He said he was misled about the nature and scale of phone hacking just as the Commitee had been.